We are accelerating the pace
to offer sustainable properties

In a relatively short space of time sustainability has become a disruptive force in business and
Pandox is working on finding its role in this new, fast-changing landscape, above all by
identifying projects that create the most benefits in an industry with long investment cycles.
It is an industry that also has to navigate and report according to the EU’s new Taxonomy
Regulation. The majority of our turnover, capital expenditure and operating expenses is covered by the new taxonomy. We have also started to analyse what proportion of our economic activities eligible with the taxonomy criteria – an effort that can be described as laying the tracks while the train is in motion, because new updates are coming all the time and many requirements are subject to interpretation.

Climate work requires new forms of cooperation
In 2021 Pandox established a strategy council consisting of representatives from the executive
management team to set important strategic priorities for the Company’s continued sustainability work. This includes how to limit our impact on the climate, but also how to adapt our business to meet new requirements and expectations from our stakeholders.

Pandox is focusing on integrating sustainability in a strategic and structured way throughout the property portfolio. The extent to which we can achieve this differs between our two business segments. In Operator Activities we can control our sustainability agenda ourselves, whereas in Property Management we are dependent on tenants making changes in areas such as
energy consumption and how properties are operated. To achieve our ambition of resource-efficient properties throughout the portfolio, we therefore need to continue developing the way we work and to identify processes for cooperation with tenants, hotel guests and suppliers. This is a substantial and important task, the complexity of which should not be underestimated. There are multiple dimensions to consider, particularly in terms of contracting practices, accountability
and willingness to invest. The pandemic has unfortunately shifted the focus in the hotel
industry from development to survival, often at the expense of long-term, capital-intensive sustainability investments. I’m convinced that, once the pandemic ends, we can work with our business partners to find the right processes, targets and incentives to create attractive and sustainable hotel products. Until then Pandox is running its own pilot projects to create climate-smart properties that will show how to generate value for all parties.

Climate resilience analysis and science-based targets
Another important area of focus is analysing how resilient Pandox’s properties are against
the effects of climate change – both physically and in terms of revenue. The need for this
became very obvious last summer when one of our hotel properties was badly affected by
the floods in Bad Neuenahr, Germany. We will therefore perform an in-depth climate resilience analysis of our properties and produce action plans where these are needed, starting in 2023.
We will also analyse what having science-based targets (SBT) would mean for Pandox,
with the aim of submitting a commitment letter in 2022

Certification process continues through green investment programmes
Pandox has a medium-term ambition to have all 20 properties that we operate classified as green. We are doing this through our green investment programmes, where BREEAM certification, at
the Very Good level is proof that we are succeeding in this effort. The first programme, which covers 12 properties and ends in 2023, is progressing according to plan. A couple of the hotels have already exceeded their sustainability targets. In 2020 three properties received BREEAM In-Use certification at the Very Good level. In 2021 two additional properties received the same rating as part of the green investment programme and one hotel within Property Management. A further seven properties have been submitted for assessment. Our aim is to launch a new investment programme for an additional six hotels in 2022. As part of this work, we have initiated a dialogue with Pandox’s long-term lenders regarding green financing.

An inclusive and equal company
The pandemic has increased the labour shortage in the hotel industry. Many of those laid off
or furloughed during the pandemic have retrained and applied for work in other industries. This is one of the most important challenges for us to solve within Pandox’s Operator Activities. It is therefore even more important for us to take good care of the employees we have. In this respect Pandox has a strong platform to continue to build on. The Allbright organisation’s equality and inclusion report in 2021 showed that Pandox has a strong culture in which employees feel included and respected. According to our own employee survey, all employees at the head office and within Property Management would highly recommend Pandox as an employer. We’re
really proud of that!

We’re getting ready for a new year – join us

Stockholm, March 2022
Caroline Tivéus
SVP, Director of Sustainable Business